Wow, that sure was some deep crap he was talking about at the expensive dinner! That bit about the poor unwashed and unworthy 47% that don't pay taxes! He's a riot!

Then he talks about the economy, did you catch any of that? This quote sure is scary! Hope he's wrong!

Quote:

Romney: Yeah, it's interesting…the former head of Goldman Sachs, John Whitehead, was also the former head of the New York Federal Reserve. And I met with him, and he said as soon as the Fed stops buying all the debt that we're issuing—which they've been doing, the Fed's buying like three-quarters of the debt that America issues. He said, once that's over, he said we're going to have a failed Treasury auction, interest rates are going to have to go up. We're living in this borrowed fantasy world, where the government keeps on borrowing money. You know, we borrow this extra trillion a year, we wonder who's loaning us the trillion? The Chinese aren't loaning us anymore. The Russians aren't loaning it to us anymore. So who's giving us the trillion? And the answer is we're just making it up. The Federal Reserve is just taking it and saying, "Here, we're giving it.' It's just made up money, and this does not augur well for our economic future.

You know, some of these things are complex enough it's not easy for people to understand, but your point of saying, bankruptcy usually concentrates the mind.

Italics mine. So is this true? Is the Fed really buying three-quarters of all treasury debt?

The short answer is no. The longer answer is that the Fed has engaged in two rounds of quantitative easing and just recently announced a third. The first one, which started at the end of 2008, mostly involved the purchase of mortgage-backed securities. Purchase of treasury debt was fairly small. The second round, which took place in the first half of 2011, did consist mostly of treasury debt. It amounted to $600 billion, and led to a spate of horror stories about how the Fed was purchasing 61% of all treasury issues. Since then, however, the Fed has maintained a steady level of treasury debt, and the third round of quantitative easing, like the first, is mostly focused on the purchase of mortgage-backed securities. This year, as CNBC reports, the Fed has been a modest player in the market for treasury debt:

_________________With friends like Guido, you will not have enemies for long.

“Intellect is invisible to the man who has none” Arthur Schopenhauer

"The difference between genius and stupidity is that genius has its limits."Albert Einstein

So, the FED has only doubled their holdings since 2004? How comforting. Here is a further explanation of how the FED is monetizing the debt....bolding is mine.

Here is the reality: under ZIRP, all bonds with a maturity inside the guaranteed 0% envelope are essentially cash equivalents. This means all bonds 3 years and less, which as is to be expected for riskless paper, have a coupon of roughly 0% (except Fed counterparty risk of course, because the only reason they should trade above 0% is if the Fed loses control of inflation and ends ZIRP prematurely before its announced end date now sometime in 2015). When the Treasury issues them the buyers takes on ZERO risk, thanks to ZIRP. This is also the reason why the Fed sells $45 billion in short-end paper each month, as part of Twist sterilization. In essence the only debt issuance that matters for the US Treasury is that of longer-dated issuance. This amounts to roughly $45 billion per month in the 10-30 year window, and is virtually all the debt that the Fed monetizes on the long-end as part of Twist. This is also knows as Flow as we have explained repeatedly, but we don't except someone still stuck teaching 1980s economics to understand this (Goldman explained this here)

But this is not news: back in February we noted that Under Twist the fed has monetized 91% of all LT gross issuance.

Between Twist 1 and 2, the Treasury has not auctioned off one dollar of gross LT debt to the private market, as evidenced by the total inventory of 10-30 year paper which has remained fixed at $650 billion. It is this liquidity limitation that forced Bernanke to monetize not more TSYs, but to commence buying Mortgage Backed debt.

The fact that Krugman does not get this simplest fact about the nuances in the Fed's monetization activities demonstrates just how dangerous it is to assume that just because someone has been awarded a Nobel, they automatically are an expert in something, anything, especially involving numbers.

And because we enjoy spreading knowledge, and for the benefit of even the most math-challenged Economics professors, here again is a simple clip showing how Romney is actually lowballing the real number of relevant gross issuance, which is nearly all in the critical 10-30 year ballpark, and where the Fed will soon be virtually the sole marginal market player.

And also, what do you think of the FED's QE to infinity? You know, buying mortgage backed securities to the tune of $40 billion a month until unemployment improves? And keeping ZIRP in force until 2015 that essentially penalizes anybody who tries to save money, like pensioners?

I think I would look more closely at your sources for confirmation before leaping to a conclusion on the accuracy of an conspiracy theory blog.

From your link:

And that is how the Fed effectively took over control of the United States, as without it, it is game over. This is also why the ongoing presidential election is a farce, and has absolutely no bearing or significance for the future of the US, whose true ruler does not reside at 1600 Pennsylvania Avenue, but instead holds America hostage in a powerful Stockholm Syndrome grip from the deep recesses of the Marriner Eccles building located, paradoxically, on Constitution Avenue.

Don't worry though: like any "true democracy", the real "leader" of the nation will never be eligible for popular vote. Ever.

_________________With friends like Guido, you will not have enemies for long.

“Intellect is invisible to the man who has none” Arthur Schopenhauer

"The difference between genius and stupidity is that genius has its limits."Albert Einstein

I think I would look more closely at your sources for confirmation before leaping to a conclusion on the accuracy of an conspiracy theory blog.

From your link:

And that is how the Fed effectively took over control of the United States, as without it, it is game over. This is also why the ongoing presidential election is a farce, and has absolutely no bearing or significance for the future of the US, whose true ruler does not reside at 1600 Pennsylvania Avenue, but instead holds America hostage in a powerful Stockholm Syndrome grip from the deep recesses of the Marriner Eccles building located, paradoxically, on Constitution Avenue.

Don't worry though: like any "true democracy", the real "leader" of the nation will never be eligible for popular vote. Ever.

I think I would look more closely at your sources for confirmation before leaping to a conclusion on the accuracy of an conspiracy theory blog.

From your link:

And that is how the Fed effectively took over control of the United States, as without it, it is game over. This is also why the ongoing presidential election is a farce, and has absolutely no bearing or significance for the future of the US, whose true ruler does not reside at 1600 Pennsylvania Avenue, but instead holds America hostage in a powerful Stockholm Syndrome grip from the deep recesses of the Marriner Eccles building located, paradoxically, on Constitution Avenue.

Don't worry though: like any "true democracy", the real "leader" of the nation will never be eligible for popular vote. Ever.

You actually think Obama is in charge???

No, he is limited by the Legislative and Judicial branches just like every other President.

Quote:

Oh, and I would take that source over a bought and paid for CNBC!

I am sure that you would, but an anonymous source is always questionable to rational thinking people and an anonymous source charging a conspiracy is even more so.

_________________With friends like Guido, you will not have enemies for long.

“Intellect is invisible to the man who has none” Arthur Schopenhauer

"The difference between genius and stupidity is that genius has its limits."Albert Einstein

No, he is limited by the Legislative and Judicial branches just like every other President.

Well, yes, but like most of those in those branches, he is bought and paid for by big pharma, the oil industry, and the banks. They call the shots.

Quote:

an anonymous source is always questionable to rational thinking people and an anonymous source charging a conspiracy is even more so.

You would be surprised at how accurate that anonymous source has been. And widely read....from Wiki.....

Zero Hedge is a news website, content aggregator, and collection of blogs by contributing editors. It reports on economics, Wall Street, and the financial sector and is credited with bringing the controversial practice of flash trading to public attention in 2009 via a series of posts alleging that Goldman Sachs' access to flash order information allowed the firm to gain unfair profits. The news portion of the site is written by a group of editors who collectively write under the pseudonym "Tyler Durden".

Zero Hedge was founded in January 2009.[1] Posts are signed "Tyler Durden," a character in the Chuck Palahniuk book and movie Fight Club,[2] reflecting the news site's activist posture.[1] Despite speculation that "Tyler Durden" is a pseudonym of Daniel Ivandjiiski,[2][3] who was penalized for insider trading in New York in September 2008,[4] Ivandjiiski denies being a founder of Zero Hedge. Rather, he says he is one of several writers contributing to the site under the pseudonym.[4] In an interview, "Durden" said there were four editors at Zero Hedge[1] but another editor says there are up to 40.[note 1][2] Editors have experience in various areas of finance and operations, differing from journalists who become experts about finance as they write about it, but have no practical work experience in the sector.[1] The online newspaper publishes anonymously to protect the editors from retaliation for dissident speech.[1] Durden maintains this protects its integrity, objectivity and independence, as well. Durden cites the First Amendment to the United States Constitution and a 1995 U.S. Supreme Court case, McIntyre v. Ohio Elections Commission,[1] which upheld anonymity as a right of free speech.[5][note 2]Readership and influence

By September 2009, Zero Hedge had begun drawing more traffic than more established financial websites[4] with 333,000 unique visitors a month, impressing even those who say the news site is full of conspiracy theory and "apocalyptic world view".[3] Durden says two-thirds of its readers are from Wall Street.[1] According to Quantcast, Zero Hedge has as of 2012 a monthly global traffic of 1.8 million people.[6] Under the name Tyler Durden, Ivandjiiski was interviewed on Bloomberg Radio[2][7] and Zero Hedge has been quoted in the Columbia Journalism Review.[8]

No, he is limited by the Legislative and Judicial branches just like every other President.

Well, yes, but like most of those in those branches, he is bought and paid for by big pharma, the oil industry, and the banks. They call the shots.

Quote:

an anonymous source is always questionable to rational thinking people and an anonymous source charging a conspiracy is even more so.

You would be surprised at how accurate that anonymous source has been. And widely read....from Wiki.....

Zero Hedge is a news website, content aggregator, and collection of blogs by contributing editors. It reports on economics, Wall Street, and the financial sector and is credited with bringing the controversial practice of flash trading to public attention in 2009 via a series of posts alleging that Goldman Sachs' access to flash order information allowed the firm to gain unfair profits. The news portion of the site is written by a group of editors who collectively write under the pseudonym "Tyler Durden".

Zero Hedge was founded in January 2009.[1] Posts are signed "Tyler Durden," a character in the Chuck Palahniuk book and movie Fight Club,[2] reflecting the news site's activist posture.[1] Despite speculation that "Tyler Durden" is a pseudonym of Daniel Ivandjiiski,[2][3] who was penalized for insider trading in New York in September 2008,[4] Ivandjiiski denies being a founder of Zero Hedge. Rather, he says he is one of several writers contributing to the site under the pseudonym.[4] In an interview, "Durden" said there were four editors at Zero Hedge[1] but another editor says there are up to 40.[note 1][2] Editors have experience in various areas of finance and operations, differing from journalists who become experts about finance as they write about it, but have no practical work experience in the sector.[1] The online newspaper publishes anonymously to protect the editors from retaliation for dissident speech.[1] Durden maintains this protects its integrity, objectivity and independence, as well. Durden cites the First Amendment to the United States Constitution and a 1995 U.S. Supreme Court case, McIntyre v. Ohio Elections Commission,[1] which upheld anonymity as a right of free speech.[5][note 2]Readership and influence

By September 2009, Zero Hedge had begun drawing more traffic than more established financial websites[4] with 333,000 unique visitors a month, impressing even those who say the news site is full of conspiracy theory and "apocalyptic world view".[3] Durden says two-thirds of its readers are from Wall Street.[1] According to Quantcast, Zero Hedge has as of 2012 a monthly global traffic of 1.8 million people.[6] Under the name Tyler Durden, Ivandjiiski was interviewed on Bloomberg Radio[2][7] and Zero Hedge has been quoted in the Columbia Journalism Review.[8]

CNBC only reports what has been spoon fed to it )

A wiki supposition on a conspriacy blog? Can the criteria for credibility be lowered any farther?

_________________With friends like Guido, you will not have enemies for long.

“Intellect is invisible to the man who has none” Arthur Schopenhauer

"The difference between genius and stupidity is that genius has its limits."Albert Einstein

Wow, that sure was some deep crap he was talking about at the expensive dinner! That bit about the poor unwashed and unworthy 47% that don't pay taxes! He's a riot!

Then he talks about the economy, did you catch any of that? This quote sure is scary! Hope he's wrong!

Quote:

Romney: Yeah, it's interesting…the former head of Goldman Sachs, John Whitehead, was also the former head of the New York Federal Reserve. And I met with him, and he said as soon as the Fed stops buying all the debt that we're issuing—which they've been doing, the Fed's buying like three-quarters of the debt that America issues. He said, once that's over, he said we're going to have a failed Treasury auction, interest rates are going to have to go up. We're living in this borrowed fantasy world, where the government keeps on borrowing money. You know, we borrow this extra trillion a year, we wonder who's loaning us the trillion? The Chinese aren't loaning us anymore. The Russians aren't loaning it to us anymore. So who's giving us the trillion? And the answer is we're just making it up. The Federal Reserve is just taking it and saying, "Here, we're giving it.' It's just made up money, and this does not augur well for our economic future.

You know, some of these things are complex enough it's not easy for people to understand, but your point of saying, bankruptcy usually concentrates the mind.

I haven't lived in the U.S. for 20 years, but as I recall I payed little income tax myself because of the Earned Income Tax Credit....which if my recollections serve me from earlier times was championed by the Reagan Administration as the conservative response to liberal government benefits and social programs. So, in effect, what we have is the present day millionaire and billionaire Republicans declaring that they no longer have any interest in democratic principles and will begin fixing elections like every other third world country...except they won't admit it of course...they will call it the fight against "voter fraud."

All of what Romney said may not be 100% correct, but what he was correct. The Federal Reserve is just dumping money on the economy and messing everything up. They need to just butt out.

That part is correct; but the Fed was inflating the money supply under Bush also, and most previous administrations since WWII. They have been able to get away with it as long as the U.S. Dollar was the World's Reserve Currency, and the U.S. economy was able to grow sufficiently to absorb the increased supply of dollars available.

But, a declining dollar was the reason why the BRIC Nations (Brazil, Russia, India and China) were working through the theorizing of creating a new world currency to replace the Dollar and the Euro for international trades. They've been aware for years that the U.S. has been paying less and less for more and more imports from the rest of the world, but as long as the Dollar was the standard for world currency, everyone has been stuck getting payed with devaluing dollars. As a sidenote, it's worth pointing out that some critical analysts of U.S. foreign policy point to Saddam Hussein's decision to switch from the Dollar to the Euro for Iraqi oil trades as the no.1 reason why Bush ordered the overthrow and the invasion of Iraq. If other oil-producing-less than friendly nations followed his example, that could have started the economic crisis during his administration. The difference now is that the U.S. debt to GDP ratio has grown so large under Obama, that U.S. suppliers are getting concerned about whether or not it is going to be worth the hassle. And we are beginning to see signs that economic growth has stalled out even in China, where REAL GDP may be zero for this year, rather than the official 8% claim that importers and exporters don't take seriously anyway.

What all this boils down to, and the part that people focused on money seem to be blissfully unaware of, is that economics is constrained by real world factors like energy and resource costs. Neither liberal economic theory/nor conservative economic theory is going to be worth anything more than campaign rhetoric now, because they are just different methods of running a capitalist economic system, which by its very nature is chaotic and unable to function at all in a world where natural limits to growth prevent further 3 to 5% increases in GDP. Once all the liberals and the conservatives realize that they are not going to get payed back in full on money loaned out today, then that banking crisis that started four years ago will be right back again, except there will likely be no way of fooling anyone that they will get the future returns they are expecting.